Fourth Quarter Net New Home Orders, up 352%
Full Year Total Revenue of $1.21 billion
Fourth Quarter Home sales revenue of $379.7 million, driven by 664 home closings at an average price of $572,000
Fourth Quarter Net income of $12.5 million, or $0.33 per diluted share
Full Year Net Income of $29.2 million or $0.75 per diluted share
Entered Colorado market
Year-end book value per share of $17.88, an 11.4% increase
DALLAS, Feb. 29, 2024 (GLOBE NEWSWIRE) — Landsea Homes Corporation (NASDAQ:LSEA) (“Landsea Homes” or the “Company”), a publicly traded homebuilder, reported financial results for the fourth quarter and full year ended December 31, 2023. For the quarter, the Company reported pretax income of $18.8 million, net income of $12.5 million, or $0.33 per diluted share and adjusted net income (a non-GAAP measure) of $16.1 million or $0.43 per diluted share. For the full year, pretax income was $44.5 million, net income was $29.2 million, or $0.75 per diluted share and adjusted net income was $47.9 million or $1.22 per diluted share.
Management Commentary
“Landsea Homes ended 2023 on a strong note, as the company posted healthy profits and a significant year-over-year increase in net new orders in the fourth quarter”, said John Ho, Landsea Homes’ Chief Executive Officer. “Net income for the quarter came in at $12.5 million, or $0.33 per diluted share on an adjusted gross margin of 20.8%, while orders increased by 352% as compared to the fourth quarter of 2022. We also grew our year-end book value per share to $17.88, representing an 11% increase over year-end 2022.”
Mr. Ho continued, “2023 was a pivotal year for Landsea Homes, as many of the actions we took during the year will have a lasting impact on our company. From entering new markets to executing several capital markets transactions, Landsea Homes laid the foundation for continued growth and increased stability for our shareholder base and capital structure. We believe these achievements make us better equipped to succeed as a public homebuilder and will bear fruit well into the future.”
Mr. Ho added, “Following the close of the quarter, we entered into a definitive agreement to buy DFW-based Antares Homes, which will give us approximately 19 actively selling communities and a strong pipeline of over 2,000 lots in the market. We believe Antares fits perfectly within our organization, both from a pricing and product standpoint, and gives us a great platform from which to grow our presence in this high-growth market. We look forward to the Antares team joining the Landsea family upon the closing of the deal.”
Fourth Quarter Operating Results
Net new home orders increased 352% to 398 homes with a dollar value of $218.9 million, an average sales price of $550,000 and a monthly absorption rate of 2.2 sales per active community. This compares to 88 homes with a dollar value of $57.5 million, an average sales price of $653,000 and a monthly absorption rate of 0.5 sales per active community in the prior year period. Cancellation rate was 13% compared to 72% in fourth quarter 2022.
The 7% decrease in total revenue to $397.6 million compared to $426.0 million in the fourth quarter of 2022 was primarily driven by increased financing incentives and geographic mix as the New York and Texas operations delivered $29.1 million in the fourth quarter of 2022.
The company ended the year with 11,176 lots owned and controlled, representing approximately 5 years of supply based on 2023 home closings. 41% of the lots were owned and 59% of the lots were controlled through contracts and option agreements.
Total homes delivered decreased 6% to 664 homes at an average sales price of $572,000 compared to 703 homes at an average sales price of $594,000 in the fourth quarter of 2022.
Home sales gross margin was 15.9% in the fourth quarter of 2023, compared to 19.0% in the prior year period. Adjusted home sales gross margin (a non-GAAP measure) decreased to 20.8% compared to 23.4% in the fourth quarter 2022. The decrease was primarily the result of additional sales incentives used to close homes during the quarter.
Net income attributable to Landsea Homes was $12.5 million or $0.33 per diluted share compared to $25.6 million or $0.62 per diluted share in the prior year period. Adjusted net income (a non-GAAP measure) attributable to Landsea Homes was $16.1 million compared to $33.3 million in the prior year period.
Adjusted EBITDA (a non-GAAP measure) was $40.3 million compared to $53.9 million in the prior year period.
Full Year 2023 Operating Results
Net new home orders were 1,947 homes with a dollar value of $1.1 billion, an average sales price of $571,000, and a monthly absorption rate of 2.8 sales per active community. This compares to 1,520 homes with a dollar value of $959.6 million, an average sales price of $631,000 and a monthly absorption rate of 2.4 sales per active community in the prior year. The increase in new home orders was primarily from a doubling of orders in the Arizona segment and a 51% increase in California, partially offset by a 5% decrease in the Florida segment.
Total revenue decreased 16% to $1.2 billion compared to $1.4 billion for the full year 2022, primarily driven by the decrease from New York and Texas along with increased incentives across the operating divisions related to higher mortgage rates, partially offset by the relatively steady performance of the Florida division.
Total homes delivered for the year totaled 2,123 homes at an average sales price of $551,000 compared to 2,370 homes delivered at an average sales price of $588,000 for the full year 2022.
Total homes in backlog at the end of 2023 was 517 homes with a dollar value of $335.6 million and an average sales price of $649,000 compared to 670 homes with a dollar value of $380.9 million and an average sales price of $569,000 at December 31, 2022.
Home sales gross margin decreased to 17.3% from 20.4% in the prior year. Adjusted home sales gross margin (a non-GAAP measure) decreased to 22.4% compared to 26.9% in the prior year. The decrease was primarily due to increased closing incentives across the operating segments.
Net income attributable to Landsea Homes was $29.2 million or $0.75 per diluted share compared to $73.6 million and $1.70 per diluted share in the prior year period. Adjusted net income attributable to Landsea Homes (a non-GAAP measure) was $47.9 million or $1.22 per diluted share compared to $123.3 million and $2.85 in the prior year.
Adjusted EBITDA (a non-GAAP measure) was $112.3 million compared to $208.0 million in the prior year.
Balance Sheet
As of December 31, 2023, the Company had total liquidity of $431.3 million consisting of cash and cash equivalents and cash held in escrow of $168.6 million as well as $262.6 million in availability under the Company’s $675.0 million unsecured revolving credit facility. Total debt, net of issuance costs, was $543.8 million at December 31, 2023 compared to $505.4 million at December 31, 2022.
Landsea Homes’ ratio of debt to capital was 44.1% at December 31, 2023 and the Company’s net debt to total capital (a non-GAAP measure) was 30.4% at December 31, 2023. This compares to a debt to capital ratio of 41.6% and a net debt to total capital ratio of 30.0% at December 31, 2022.
During 2023, the Company repurchased 9% or 3.6 million of its outstanding shares for a total value of $34.4 million. The book value per share at December 31, 2023 was $17.88, an 11.4% increase over December 31, 2022.
Mr. Ho concluded, “Landsea Homes is well positioned to take advantage of the favorable homebuilding fundamentals, thanks to our strong market positioning and the appeal of our High Performance Homes. In addition, our asset light land portfolio, improving asset turns and entry-level focus have our company primed to generate improving returns on capital. As a result, I am very optimistic about the future of Landsea Homes.”
2024 Outlook
First quarter 2024
New home deliveries anticipated to be in a range of 480 to 500
Delivery ASPs expected to be in a range of $560,000 to $575,000
Home sales gross margins between 15% and 16% on a GAAP basis and between 20% and 21% on an adjusted basis
Full Year 2024
New home deliveries anticipated to be in a range of 2,500 to 2,900
Delivery ASPs expected to be in a range of $500,000 to $525,000
Home sales gross margins between 17% and 18% on a GAAP basis and between 21% and 23% on an adjusted basis
Conference Call
The Company will hold a conference call today at 10:00 a.m. Eastern Time to discuss its fourth quarter 2023 results.
Toll-free dial-in number: 1-877-704-4453
International dial-in number: 1-201-389-0920
The conference call will also be broadcast live and available for replay in the Investors section of the Landsea Homes website at https://ir.landseahomes.com/.
A replay of the conference call will be available after 2:00 p.m. Eastern time on the same day through March 14, 2024 at 11:59 PM.
Replay Details:
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13744526
About Landsea Homes Corporation
Landsea Homes Corporation (NASDAQ:LSEA) is a publicly traded residential homebuilder based in Dallas, Texas that designs and builds best-in-class homes and sustainable master-planned communities in some of the nation’s most desirable markets. The Company has developed homes and communities in New York, Boston, New Jersey, Arizona, Colorado, Florida, Texas and throughout California in Silicon Valley, Los Angeles, and Orange County. Landsea Homes was honored as the Green Home Builder 2023 Builder of the Year, after being named the 2022 winner of the prestigious Builder of the Year award, presented by BUILDER magazine, in recognition of a historical year of transformation.
An award-winning homebuilder that builds suburban, single-family detached and attached homes, mid-and high-rise properties, and master-planned communities, Landsea Homes is known for creating inspired places that reflect modern living and provides homebuyers the opportunity to “Live in Your Element.” Our homes allow people to live where they want to live, how they want to live – in a home created especially for them.
Driven by a pioneering commitment to sustainability, Landsea Homes’ High Performance Homes are responsibly designed to take advantage of the latest innovations with home automation technology supported by Apple®. Homes include features that make life easier and provide energy savings that allow for more comfortable living at a lower cost through sustainability features that contribute to healthier living for both homeowners and the planet.
Led by a veteran team of industry professionals who boast years of worldwide experience and deep local expertise, Landsea Homes is committed to positively enhancing the lives of our homebuyers, employees, and stakeholders by creating an unparalleled lifestyle experience that is unmatched.
For more information on Landsea Homes, visit: www.landseahomes.com.
Forward-Looking Statements
Certain statements in this press release may constitute “forward-looking statements” within the meaning of the federal securities laws, including, but not limited to, our expectations for future financial performance, business strategies or expectations for our business, including as they relate to anticipated effects of the business combination with LF Capital Acquisition Corporation on January 7, 2021 (the “Business Combination”). These statements constitute projections, forecasts, and forward-looking statements, and are not guarantees of performance. Landsea Homes cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Words such as “may,” “can,” “should,” “will,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target,” “look” or similar expressions may identify forward-looking statements. Specifically, forward-looking statements may include statements relating to:
the benefits of the Business Combination and the acquisitions of Vintage Estate and Hanover (the “Acquisitions”);
the future financial performance of the Company;
changes in the market for Landsea Homes’ products and services; and
other expansion plans and opportunities.
These forward-looking statements are based on information available as of the date of this press release and our management’s current expectations, forecasts, and assumptions, and involve a number of judgments, risks and uncertainties that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.
These risks and uncertainties include, but not are limited to, the risk factors described by Landsea Homes in its filings with the Securities and Exchange Commission (“SEC”). These risk factors and those identified elsewhere in this press release, among others, could cause actual results to differ materially from historical performance and include, but are not limited to:
the ability to recognize the anticipated benefits of the Acquisitions, which may be affected by, among other things, competition, the ability to integrate the combined businesses and the acquired business, and the ability of the combined business and the acquired business to grow and manage growth profitably;
costs related to continuing as a public company;
the ability to maintain the listing of Landsea Homes’ securities on Nasdaq;
the outcome of any legal proceedings that may be instituted against the Company;
changes in applicable laws or regulations;
the inability to launch new Landsea Homes products or services or to profitably expand into new markets;
the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors;
risks and uncertainties relating to the material weaknesses in our internal controls over financial reporting;
the possibility that additional information may arise that would require us to make further adjustments or revisions to our historical financial statements, report additional material weaknesses or delay the filing of our current financial statements; and
other risks and uncertainties indicated in Landsea Homes’ SEC reports or documents filed or to be filed with the SEC by Landsea Homes.
Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and you should not place undue reliance on these forward-looking statements in deciding whether to invest in our securities. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Media Contact:
Annie Noebel
Cornerstone Communications
anoebel@cornerstonecomms.com
(949) 449-2527
Investor Relations Contact:
Drew Mackintosh, CFA
Mackintosh Investor Relations, LLC
drew@mackintoshir.com
(310) 924-9036
Landsea Homes Corporation
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
December 31,
2023
2022
Assets
Cash and cash equivalents
$
119,555
$
123,634
Cash held in escrow
49,091
17,101
Real estate inventories
1,121,726
1,093,369
Due from affiliates
4,348
3,744
Goodwill
68,639
68,639
Other assets
107,873
134,009
Total assets
$
1,471,232
$
1,440,496
Liabilities
Accounts payable
$
77,969
$
74,445
Accrued expenses and other liabilities
160,256
149,426
Due to affiliates
881
884
Line of credit facility, net
307,631
505,422
Senior notes, net
236,143
—
Total liabilities
782,880
730,177
Commitments and contingencies
Equity
Stockholders’ equity:
Preferred stock, $0.0001 par value, 50,000,000 shares authorized, none issued and outstanding as of December 31, 2023 and December 31, 2022, respectively
—
—
Common stock, $0.0001 par value, 500,000,000 shares authorized, 41,382,453 issued and 36,520,894 outstanding as of December 31, 2023, 42,110,794 issued and 40,884,268 outstanding as of December 31, 2022
4
4
Additional paid-in capital
465,290
497,598
Retained earnings
187,584
158,348
Total stockholders’ equity
652,878
655,950
Noncontrolling interests
35,474
54,369
Total equity
688,352
710,319
Total liabilities and equity
$
1,471,232
$
1,440,496
Landsea Homes Corporation
Consolidated Statements of Operations
(in thousands, except share and per share amounts)
Three Months Ended December 31,
Year Ended December 31,
2023
2022
2023
2022
Revenue
Home sales
$
379,668
$
417,481
$
1,169,867
$
1,392,750
Lot sales and other
17,947
8,477
40,080
53,699
Total revenue
397,615
425,958
1,209,947
1,446,449
Cost of sales
Home sales
319,392
337,984
967,034
1,108,204
Lot sales and other
12,169
10,775
27,939
51,321
Total cost of sales
331,561
348,759
994,973
1,159,525
Gross margin
Home sales
60,276
79,497
202,833
284,546
Lot sales and other
5,778
(2,298
)
12,141
2,378
Total gross margin
66,054
77,199
214,974
286,924
Sales and marketing expenses
21,576
24,939
73,248
89,305
General and administrative expenses
27,219
18,591
101,442
89,325
Total operating expenses
48,795
43,530
174,690
178,630
Income from operations
17,259
33,669
40,284
108,294
Other income, net
1,491
740
4,261
86
Loss on remeasurement of warrant liability
—
—
—
(7,315
)
Pretax income
18,750
34,409
44,545
101,065
Provision for income taxes
5,572
7,940
11,895
25,400
Net income
13,178
26,469
32,650
75,665
Net income attributable to noncontrolling interests
703
888
3,414
2,114
Net income attributable to Landsea Homes Corporation
$
12,475
$
25,581
$
29,236
$
73,551
Earnings per share:
Basic
$
0.33
$
0.63
$
0.75
$
1.71
Diluted
$
0.33
$
0.62
$
0.75
$
1.70
Weighted average shares outstanding:
Basic
37,349,364
39,929,310
38,885,003
42,052,696
Diluted
37,537,270
40,065,480
39,076,322
42,199,462
Home Deliveries and Home Sales Revenue
Three Months Ended December 31,
2023
2022
% Change
Homes
Dollar Value
ASP
Homes
Dollar Value
ASP
Homes
Dollar Value
ASP
(dollars in thousands)
Arizona
162
$
70,629
$
436
162
$
73,631
$
455
—%
(4)%
(4)%
California
199
169,183
850
183
160,366
876
9%
5%
(3)%
Colorado
11
7,410
674
—
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